Is It Smarter To Buy A New Or Used Car?

Buying A New Car

Pro: Get The Latest Technology and Features

New cars will almost always have the latest technology features that may not be available on older models of the same vehicle. Some of the newest features such as driver assistance systems and multimedia options that connect to a smartphone may not be available on some used cars if they are too old.

Pro: Better Financing Options

If you are already certain you want to finance your car, there is a good chance you’ll get a lower interest rate on a new car than a used one. New cars will always have a higher resale value because they are less likely to have mechanical issues immediately after being bought. Manufacturers will typically offer a good amount of promotions or incentives towards financing so dealers can pass these savings on to their customers.

Con: Higher Cost Of Car Insurance

New vehicles typically come with a higher insurance cost as opposed to used cars. This is because new cars are seen as more valuable and therefore more expensive to repair or replace if an accident were to occur. You should expect the average cost of your monthly insurance to rise just after buying a new car.

Con: Faster Depreciation

New cars may hold higher value and worth than used cars, but they depreciate at a significantly higher rate. This means that the brand-new car you just bought will lose a large portion of its original value as soon as it leaves the dealership just because it’s no longer “new.” It’s also important to note that as the vehicle’s mileage goes up, the value goes down.

Used Cars For Sale Near Me

Buying A Used Car

Pro: Less Expensive

It may sound obvious, but one of the biggest advantages of buying a used car is easily paying a lower price for the same vehicle. Used cars will always be less expensive than new cars of the same make/model. This means that buying a previously owned vehicle can save you thousands in total with or without an auto loan. You also won’t have to pay as much of a hefty down payment as a new car would demand.

Pro: Easier To Negotiate Price

Dealers are much more open and willing to negotiate with sellers who are interested in a used car, as well as claim a lower sticker price. With a few negotiating tactics and a little luck, you could get any type of onus from free oil changes to a higher trade-in bonus.

Con: Higher Interest Rate

If your credit score is not very high, you could be offered a higher interest rate when financing a used car compared to a new car. This can make the overall cost of a used car higher, even if the sticker price is lower. One of the ways to work around this is that having a high credit score has the opposite effect and can reduce your overall car price.

Con: Higher Chance Of Breaking Down

It is no surprise that buying a lower quality vehicle that is a few years outdated will have a much higher chance of breaking down due to mechanical issues. It’s also important to note that the older a vehicle becomes, the more expensive its parts and services generally are. This seems to be a bigger concern with electric and hybrid vehicles especially since EV and battery technologies are still evolving.